What is CIBIL Score
A CIBIL Score is a three-digit numeric representation of your creditworthiness or your ability to repay debt. It is calculated based on credit behaviour that includes your payment history, current debt, and the length of your credit history. Lending institutions review your CIBIL Score before approving EMI cards, credit cards, and loans.
A good CIBIL Score may fuel the possibility of securing credit on better terms and accessing versatile financial solutions like the Bajaj Finserv Insta EMI Card. Credit score, meaning CIBIL Score, is represented by three-digit numbers ranging between 300 and 900.
Importance of CIBIL Score
Here is why maintaining a good CIBIL Score is important:
- Creditworthiness: A high CIBIL Score represents responsible financial behaviour. This includes timely bill payments and efficient debt management, which enhances your creditworthiness. Therefore, you must consider the CIBIL Score’s importance in your credit behaviour.
- Application approval: Lenders prioritise borrowers with good CIBIL Score while approving of applications. A good CIBIL Score accelerates the approval process for loans and payment cards like the Bajaj Finserv Insta EMI Card.
- Attractive interest rate: A good CIBIL Score can also help you secure lower interest rates, making loans more affordable and encouraging savings.
- Long tenure and amount: If you have a decent score of 700 or above, it will show you as a reliable borrower. In turn, the lending institutions may be more comfortable offering you higher limit for a longer tenure.
Mininum CIBIL Score for getting the Insta EMI Card
Your CIBIL Score is a measure of your credit health. Thus, it is important to determine your eligibility for the EMI Card. It is measured on a scale between 300 and 900, with 900 indicating maximum creditworthiness. The minimum CIBIL Score required for Bajaj Finserv Insta EMI Card is 720 or above. A score of 750 or above is considered excellent and can fetch favourable terms while availing of the Bajaj Finserv Insta EMI Card.
Other eligibility requirements for Insta EMI Card
Apart from the CIBIL Score of 720 or above, you must also fulfil the following requirements:
- Nationality: You must be an Indian citizen residing in India.
- Age: You must be between the age of 21 years to 65 years years.
- Income: You must have a regular source of income.
Factors affecting your CIBIL Score
- Repayment history: Making loan and card payments on time reflects your ability to meet financial commitments. Even a 30-day failure in making payments can significantly impact your score. Do set reminders and alerts to ensure timely repayments.
- Debt-to-income ratio: Your debt-to-income (DTI) ratio highlights the percentage of your income allocated to repaying debt. A higher ratio indicates overburdened finances, while a DTI ratio of 25% to 35% is wise.
- Outstanding debt: Clearing outstanding debt is important for a good CIBIL Score for the Insta EMI Card. The unpaid debt will spoil your credit report. You should repay both large and small amounts on time.
- Paying minimum amount due: Paying only the minimum amount due leads to debt traps and increased interest over time. You should pay credit card bills on time and in full to avoid debt accumulation.
- Multiple credit applications: Each application results in a hard review on your credit report. Multiple such inquiries indicate a hunger for credit, which can lower your score. Allow time between applications, especially if it was rejected earlier.
Advantages of having a high CIBIL Score
- Favourable loan terms: High CIBIL Score leads to lower interest rates and higher loan amounts, resulting in significant cost savings over time.
- Quick loan approvals: Lenders prioritise applicants with high scores, facilitating faster loan approval processes.
- Access to premium credit cards: Individuals with high scores are eligible for premium credit cards with attractive rewards and benefits.
- Negotiating power: A strong score empowers borrowers to negotiate better loan terms and interest rates with lenders.
- Lower insurance premiums: Insurance providers may consider credit scores when setting premiums, potentially reducing insurance costs.
- Financial reputation: A high CIBIL Score contributes to a positive financial reputation, crucial for major life decisions like home buying or entrepreneurship.
- Enhanced financial opportunities: Individuals with high scores can access a wider range of financial products and services.
- Lower down payment requirements: Some lenders may offer lower down payment requirements to borrowers with strong credit histories.
- Lower security deposits: Utility companies and service providers may require smaller security deposits from individuals with high scores.
Tips for maintaining a good CIBIL Score
- Pay your bills and EMIs on time: Make it a habit to pay off your credit card bills and monthly EMIs punctually to maintain a good CIBIL Score.
- Never default on payments: Always ensure you do not miss bill payments. This can harm your credit score considerably.
- Keep a healthy credit utilisation ratio: Do not exhaust your entire credit limit, as it showcases irresponsible financial behaviour. Always maintain a good credit utilisation ratio (30-40%).
- Keep old or unused credit cards active: Do not rush to deactivate your old or unused credit cards. They can contribute positively to your credit history.
- Be mindful of loan or credit card applications: Do not simultaneously apply for multiple loans or credit cards. This can give lenders the impression that you are heavily reliant on credit.
- Credit mix: Having a blend of secured and unsecured loans in your credit history reflects your experience in handling various types of credit.
- Rfrequentlyeview your credit report: Make sure to check your credit report . Report any discrepancies or errors immediately to keep your score accurate.
- Limit credit inquiries: Too many credit inquiries can lower your CIBIL Score. Only apply for credit when necessary.
- Keep an eye on joint accounts: Monitor any co-signed, guaranteed, or joint accounts regularly. Ensure payments are being made on time as any default can impact your CIBIL Score as well.
How to improve your CIBIL Score for the Insta EMI Card
Improving your CIBIL score is essential when applying for financial products like an Insta EMI card. A higher score increases your chances of approval and better terms. Here are some pointers on how to improve your CIBIL score for an Insta EMI card:
- Pay bills on time: Ensure that you pay all your credit card bills, loans, and other financial obligations on time. Set up reminders or automatic payments to avoid missing due dates.
- Reduce credit card balances: Aim to keep your credit card balances low, ideally below 30% of your credit limit. Paying down high credit card balances can have a significant positive impact on your score.
- Avoid over-borrowing: Be cautious about applying for multiple credit cards or loans simultaneously, as it can negatively impact your credit score.
- Maintain a mix of credit: Having a mix of different types of credit, such as credit cards, loans, and retail accounts, can positively influence your credit score.
- Create a budget: Develop a monthly budget to manage your finances effectively. Stick to the budget to avoid overspending and accumulating debt.
- Use credit responsibly: Use your credit cards and loans responsibly, only for necessary expenses and purchases you can afford to pay back.
Maintaining a good CIBIL Score is not just about financial health, as it gives you access to easy financing solutions. One such solution is the Bajaj Finserv Insta EMI Card, which lets you convert your purchases into manageable monthly payments and allows you to repay the amount without any interest charges, thanks to its No Cost EMIs options.
You can also avail of benefits like flexible repayment tenure and a zero down payment offer on select products. A good CIBIL Score enhances your chances to qualify for the Bajaj Finserv Insta EMI Card so that you can affordably manage all your big-ticket purchases.